Financial Highlights: Results of Operation

T
he slow growth in total budgetary resources available for use
has had a direct impact on the gross costs of USPTO operations.
Gross cost of operations increased 11.6 percent and 14.2
percent in fiscal years 2001 and 2002 respectively, but only
increased 6.9 percent in fiscal year 2004.

Due to the increase in pendency, the time it takes to
process a patent or trademark, the USPTO has been recognizing a
steadily increasing deferred revenue liability for fees
received prior to the revenue being earned. From fiscal year
2001 through fiscal year 2004, patent unearned fees increased
50.7 percent, with only a 10.3 percent increase from fiscal
year 2003 to fiscal year 2004. In fiscal year 2004, for each
month that patent pendency to first action increased, deferred
revenue increased approximately $26.2 million, with a
corresponding decrease in earned revenue. From fiscal year 2001
through fiscal year 2004, trademark unearned fees increased
$38.8 million, primarily due to a change in the methodology
used to calculate deferred revenue. In the future, in order to
reduce the backlog of unprocessed applications and reduce
pendency, additional budgetary resources will be required.